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Finding/ Interviewing Listing Agents


LounginMKL
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We are in the process of selling a single-family home for my family and I want to see if the CoBF community can provide some collective wisdom around this topic. I'm sure a lot of us have to go through this a few times in their lives. Well, it's my first time.

 

Referral

After asking for referrals from a local professional group, I was overwhelmed by the responses (seems like everyone loves their broker). Then I learned that the referred brokers usually share 20-30% of their gross commission with the referring brokers. Well, that's a pretty strong incentive to refer without much skin in the game. Ideally, I would ask for a referral from my personal network, but I don't have a local network in this case. What are some of the best ways you would source listing agents?

 

Interview

I find it difficult to differentiate the realtors with generic questions like:

- How many active listings do you have at a time

- What's your specialty?

- How will you market my home?

- Can you provide some references?

 

All realtors have been through this enough to have good answers.

Team: We have a social media and contract person that focus on what they do best.

One-man-band: I can give the listing my full attention; "you are always dealing with me."

 

I remember reading that behavioral/ situation interview questions are the best way to predict future performances. So I'm thinking of some questions that could tease out their differences

- Given offer A, B, C, how do you evaluate the offers and make a recommendation?

- Tell me a time when you had a communication problem with a client?

- Describe a situation when you had a dilemma during a transaction. How did you deal with it?

 

What other questions do you like to ask when your listing agent?

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Ive had a lot of luck working with middle aged women, who left their careers to raise the kids, and then once the kids left high school and went off to college became agents. You can absolutely ask for CVs when scouting agents. The above described agents tend to be focused, professional, dedicated, and while financially secure, doing something they are motivated to succeed at as its often a reinvigorating process getting back out in the field so to speak. 

 

I'd personally stay away from early 20 something agents...mostly enamored by "work for yourself and make lots of money" marketing... as well as the big name ones who have so much business that they dont really care about any specific transaction.

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We are looking to maximize price (timing isn't an issue) so I believe having staging and a good marketing plan is the way to go. The property is in the Bay Area so selling home shouldn't be a problem. Just looking for ways to sift through all the agents that were referred...

 

@ Spekulatius- 4.5%? How is that split? 2.5% buyer and 2% seller? If 2.25% each side, I wonder if that would drive away buyer's agent?

 

@ Gregmal- Agree. I was advised to stay away from star agents who leave his/her minions to do all the tactical work.

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We are looking to maximize price (timing isn't an issue) so I believe having staging and a good marketing plan is the way to go. The property is in the Bay Area so selling home shouldn't be a problem. Just looking for ways to sift through all the agents that were referred...

 

@ Spekulatius- 4.5%? How is that split? 2.5% buyer and 2% seller? If 2.25% each side, I wonder if that would drive away buyer's agent?

 

@ Gregmal- Agree. I was advised to stay away from star agents who leave his/her minions to do all the tactical work.

 

Any decent house in the Bay sells itself.

 

My brother just closed on a house. The listing wasn't even active yet. He saw it on Zillow as coming soon, contacted the listing agent directly, and made the deal before the house hit the market...

 

 

They are sure they don't want to keep it as a rental instead? Depending how much they owe,  the cash flow can be substantial even after hiring a property manager.

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Spekulatius- 4.5%? How is that split? 2.5% buyer and 2% seller? If 2.25% each side, I wonder if that would drive away buyer's agent?

I assume it’s split evenly. I negotiated this rate when I sold my last house in Long Island and it was pretty straightforward. I sold my former house for a 5% commission where we picked the realtor from a website (after interviewing 3 of them). These commissions are all negotiable, that much I do know. I bet you could get it as low s 4% but I didn’t try.

 

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We can try to push the commission as low as possible and select an agent primarily based on that number. However, I wonder what we are missing on the aggressiveness of the agent to get you the top dollar. Hard question as this is the road not traveled.

 

I remember when I was young, my mom got her friend to sell her house. The day before it went on the market, we received 3 offers for the listing amount. We did not counter and just picked one. Thinking about that still makes my blood boil until this day.

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Maybe a hair out of the comfort zone, but I would definitely explore a for sale by owner type deal given what details you've indicated. Bay Area properties are as liquid as money market funds.... Run a FSBO with a 3% commission for the buyer agent. This way you save 3% yourself, but have a motivated agent. You can basically then have your lawyer handle a lot of the typical real estate agent bs and do what you can, yourself. If you break down the numbers, assuming you've got a $2-3M pad(just guessing based on BA home prices) you're talking about saving yourself like $50k. So even if you need to pay on the back end to get to closing, I guarantee it would still be cheaper.

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Guest cherzeca

Whatever you do make sure your negotiate the commission. 5% is easy and I got great service for 4.5% last time.

 

From my experience, the highest volume realtors aren’t always the best.

 

I would negotiate commish...after getting a good offer. of course if I get an offer at full asking price I dont negotiate the commish but I haven't seen a full price or bidding war in a couple of decades personally,  but one way getting an improved result after the offeror stands pat and the net is lower than you would like is to then simply ask broker to move a bit...and he/she likely will and happily will to cement sale...but dont piss off your broker before getting the listing by trying to discount commish.

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Any decent house in the Bay sells itself.

 

Not true if they are trying to extract max possible price.

Even if it sells itself at $2M (for example), it won't sell itself if they gonna try to get $3M.

 

If timing is not an issue and they want max price, they should overprice it and then wait. But that's definitely not a setup RE agents like. They want fast sale for lower price - their profit is fast turnaround and more sales. So yeah maybe FSBO or really find an agent who's fine sitting on a house for half year+.

 

There are more questions: do they want to overprice it at 1.1 immediate sale price? 1.2? 1.5? 2x? Are they fine to wait half year? Year? What if there's a recession and they won't sell? Is that fine? Not?

 

In some of these cases realtor will still be best solution. Actually even in some cases of high overpricing and long wait realtor still makes sense - these $10M/20M mansions that sit on market for years do not sell themselves "by owner". But it would take specific realtor.

 

Anyway, good luck.  8)

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Prices (fees to the agent) are capped so no one will give you great "service". Why would they? It's a volume game for the agent. Since his fee is capped his incentive is to get your house sold quickly. He doesn't care if it goes for X 1.1X or 1.2X. He cares to not spend to much time on your house.

 

If you are looking for "advice" from an agent you're living on the wrong planet.

 

Also why care? Markets are reasonably efficient. Don't accept the first offer. Understand that someone might commit to price X and then haggle you down. You don't have to accept any offer. So if you are patient and show patience you will eventually sell at the price you want.

 

 

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Has anyone here done FSBO before? I don't see them around often, whether it's because they are poorly marketed, poorly priced, or buyer's agents don't want to deal with FSBO listings.

 

Freakonomics certainly supports FSBO, but I wonder why the FSBO hasn't really taken off, and Redfin/Zillow hasn't had much success in disrupting the industry.

 

http://freakonomics.com/2008/02/26/real-estate-agents-revisited/

"We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly."

 

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Prices (fees to the agent) are capped so no one will give you great "service". Why would they? It's a volume game for the agent. Since his fee is capped his incentive is to get your house sold quickly. He doesn't care if it goes for X 1.1X or 1.2X. He cares to not spend to much time on your house.

 

If you are looking for "advice" from an agent you're living on the wrong planet.

 

Also why care? Markets are reasonably efficient. Don't accept the first offer. Understand that someone might commit to price X and then haggle you down. You don't have to accept any offer. So if you are patient and show patience you will eventually sell at the price you want.

 

Agree. Maybe most people just don't want to put in the effort or need an "advisor" because the stake is so high...

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Maybe you can do a search for properties that you feel sold for higher than expected prices and look for who the agent is.  Completely different, I just closed on a property a few days ago.  The agent basically worked with my wife and I for 2 years.  We started out just looking for a co-op for me to use as an office.  It morph into something that was 5-6x of the initial price.  Along the way, I put in a bid for a condo that turned out to be a bad choice for me and I withdrew because it was internally managed (meaning everyone has to pitch in to clean up) and I was looking for something more turnkey.  Then we got outbid on another property and the seller wanted more cash equity in the deal.  We closed on a property that we are very happy about.  The agent probably showed me a dozen properties and have to deal with the seller being weird and wanting to 1031 his proceeds.  There were some fixes that needed to be taken care.  The amount of patience that this woman had justified every penny that she earned.  A lot of people mention asking behavioral questions etc. 

 

Here are some food for thought, just tell an agent that you want the highest price and you are willing to sit on it for one whole year.  If they cringe and become uncomfortable, you will know that is not the agent for you.  If they understand where you are coming from and are willing to work with you, then you've got the right agent.  It will hurt your commission negotiation.  But you will likely find the right agent.  This is similar to a manager telling prospective investors that he has a 2 year lock up.  It very quickly scares away the investors who will treat it like an ATM.  So if your agent is looking to move fast at a low price, they will give you pretty good reasons why you shouldn't try to maximize price.  I second the advice of looking for people who are older and have seen at least one cycle.  I used to be very cynical of RE agents.  After working with my current agent, I now understand why certain 40-50 year old agents manage to stay in this business for 20-30 years.  They have infinite patience and tolerate lots of BS, including mine.   

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Maybe you can do a search for properties that you feel sold for higher than expected prices and look for who the agent is.  Completely different, I just closed on a property a few days ago.  The agent basically worked with my wife and I for 2 years.  We started out just looking for a co-op for me to use as an office.  It morph into something that was 5-6x of the initial price.  Along the way, I put in a bid for a condo that turned out to be a bad choice for me and I withdrew because it was internally managed (meaning everyone has to pitch in to clean up) and I was looking for something more turnkey.  Then we got outbid on another property and the seller wanted more cash equity in the deal.  We closed on a property that we are very happy about.  The agent probably showed me a dozen properties and have to deal with the seller being weird and wanting to 1031 his proceeds.  There were some fixes that needed to be taken care.  The amount of patience that this woman had justified every penny that she earned.  A lot of people mention asking behavioral questions etc. 

 

Here are some food for thought, just tell an agent that you want the highest price and you are willing to sit on it for one whole year.  If they cringe and become uncomfortable, you will know that is not the agent for you.  If they understand where you are coming from and are willing to work with you, then you've got the right agent.  It will hurt your commission negotiation.  But you will likely find the right agent.  This is similar to a manager telling prospective investors that he has a 2 year lock up.  It very quickly scares away the investors who will treat it like an ATM.  So if your agent is looking to move fast at a low price, they will give you pretty good reasons why you shouldn't try to maximize price.  I second the advice of looking for people who are older and have seen at least one cycle.  I used to be very cynical of RE agents.  After working with my current agent, I now understand why certain 40-50 year old agents manage to stay in this business for 20-30 years.  They have infinite patience and tolerate lots of BS, including mine. 

 

+1  8)

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Has anyone here done FSBO before? I don't see them around often, whether it's because they are poorly marketed, poorly priced, or buyer's agents don't want to deal with FSBO listings.

 

Freakonomics certainly supports FSBO, but I wonder why the FSBO hasn't really taken off, and Redfin/Zillow hasn't had much success in disrupting the industry.

 

http://freakonomics.com/2008/02/26/real-estate-agents-revisited/

"We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly."

 

I'm looking to buy a house and have looked into FSBO. It's part of my daily routine to check RedFin and www.forsalebyowner.com. I don't know if marketing is an issue (Internet rectified that) or buyer's agent not wanting to show the house (I've seen some listings where the seller clearly specified that the buyer agent will get x %) are at fault but the price certainly is. Most of FSBOs I've seen are egregiously overpriced. For example, https://www.forsalebyowner.com/listing/908-8th-St-NE-Washington-DC/5c927fdfe49e3a8c318b4569. There is a similar (about the same plot of land, needs gut-reno, substantially better location, near a metro) currently unable to move for $550k.

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Maybe you can do a search for properties that you feel sold for higher than expected prices and look for who the agent is.  Completely different, I just closed on a property a few days ago.  The agent basically worked with my wife and I for 2 years.  We started out just looking for a co-op for me to use as an office.  It morph into something that was 5-6x of the initial price.  Along the way, I put in a bid for a condo that turned out to be a bad choice for me and I withdrew because it was internally managed (meaning everyone has to pitch in to clean up) and I was looking for something more turnkey.  Then we got outbid on another property and the seller wanted more cash equity in the deal.  We closed on a property that we are very happy about.  The agent probably showed me a dozen properties and have to deal with the seller being weird and wanting to 1031 his proceeds.  There were some fixes that needed to be taken care.  The amount of patience that this woman had justified every penny that she earned.  A lot of people mention asking behavioral questions etc. 

 

BG - is there a lot of effort involved with 1031? I thought it was just a form to be signed by the buyer. I've seen a few of those contingencies in listings but nothing we've put a bid on had that stipulation.

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Guest cherzeca

Maybe you can do a search for properties that you feel sold for higher than expected prices and look for who the agent is.  Completely different, I just closed on a property a few days ago.  The agent basically worked with my wife and I for 2 years.  We started out just looking for a co-op for me to use as an office.  It morph into something that was 5-6x of the initial price.  Along the way, I put in a bid for a condo that turned out to be a bad choice for me and I withdrew because it was internally managed (meaning everyone has to pitch in to clean up) and I was looking for something more turnkey.  Then we got outbid on another property and the seller wanted more cash equity in the deal.  We closed on a property that we are very happy about.  The agent probably showed me a dozen properties and have to deal with the seller being weird and wanting to 1031 his proceeds.  There were some fixes that needed to be taken care.  The amount of patience that this woman had justified every penny that she earned.  A lot of people mention asking behavioral questions etc. 

 

BG - is there a lot of effort involved with 1031? I thought it was just a form to be signed by the buyer. I've seen a few of those contingencies in listings but nothing we've put a bid on had that stipulation.

 

1031s are for commercial properties

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Maybe you can do a search for properties that you feel sold for higher than expected prices and look for who the agent is.  Completely different, I just closed on a property a few days ago.  The agent basically worked with my wife and I for 2 years.  We started out just looking for a co-op for me to use as an office.  It morph into something that was 5-6x of the initial price.  Along the way, I put in a bid for a condo that turned out to be a bad choice for me and I withdrew because it was internally managed (meaning everyone has to pitch in to clean up) and I was looking for something more turnkey.  Then we got outbid on another property and the seller wanted more cash equity in the deal.  We closed on a property that we are very happy about.  The agent probably showed me a dozen properties and have to deal with the seller being weird and wanting to 1031 his proceeds.  There were some fixes that needed to be taken care.  The amount of patience that this woman had justified every penny that she earned.  A lot of people mention asking behavioral questions etc. 

 

BG - is there a lot of effort involved with 1031? I thought it was just a form to be signed by the buyer. I've seen a few of those contingencies in listings but nothing we've put a bid on had that stipulation.

 

Depends on from who's perspective.  From the seller perspective, you have a gun to your head where you have to identify 3 property within 45 days of selling your property and then close within 180 days.  From the buyer perspective (my situation), we jumped through hoops to get all the paperwork lined up and the seller wanted to wait another 3 weeks to close because he needs time to identify a 1031 property to exchange into.  This is where my agent worked her magic and just badgered him into agreeing to close within a week.  My wife and I just about flipped out when we found out the seller wanted to close in mid Feb.  You then run into issues with the bank with rate locks and them asking for more financials. 

 

My understanding is that you typically have to wait 2 years after declaring your property is no longer your primary residence for it to qualify for 1031.  Someone smarter can verify this.

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Maybe you can do a search for properties that you feel sold for higher than expected prices and look for who the agent is.  Completely different, I just closed on a property a few days ago.  The agent basically worked with my wife and I for 2 years.  We started out just looking for a co-op for me to use as an office.  It morph into something that was 5-6x of the initial price.  Along the way, I put in a bid for a condo that turned out to be a bad choice for me and I withdrew because it was internally managed (meaning everyone has to pitch in to clean up) and I was looking for something more turnkey.  Then we got outbid on another property and the seller wanted more cash equity in the deal.  We closed on a property that we are very happy about.  The agent probably showed me a dozen properties and have to deal with the seller being weird and wanting to 1031 his proceeds.  There were some fixes that needed to be taken care.  The amount of patience that this woman had justified every penny that she earned.  A lot of people mention asking behavioral questions etc. 

 

BG - is there a lot of effort involved with 1031? I thought it was just a form to be signed by the buyer. I've seen a few of those contingencies in listings but nothing we've put a bid on had that stipulation.

 

1031s are for commercial properties

 

I believe 1031 is for investment properties. A residential property used as a rental could qualify, if I understand correctly.

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Guest cherzeca

"My understanding is that you typically have to wait 2 years after declaring your property is no longer your primary residence for it to qualify for 1031."

 

if you are renting out your former residential property on a permanent basis such you can prove change of use (ie establish you have another residence) then you should be able to do a 1031

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